New York City condo & co-op budgeting guide

Healthy finances are the foundation of a thriving building. And the key to healthy finances is a well-planned budget. Our guide covers the essentials, from the breakdown of a budget to effective development strategies and practical ways to bring your budget to life.

Perks of a powerful building budget

A well-crafted budget will impact every aspect of your building for the better.

Smooth operations

Enables efficient daily management, swift maintenance responses, and stops minor issues from becoming major expenses.

Financial stability

Builds reserves for unexpected costs, plans for improvements, and maintains stable monthly charges
for owners.

Long-term vision

Empowers your building to invest in aspirational projects and shape its future, turning "what if" into
"what's next."

Community trust

Fosters transparency, instills confidence in the board, and gets residents excited about the
building's future.

The anatomy of a building budget

Just like buildings, budgets have many different moving pieces. Understanding the structure of your condo or
co-op budget is important for effective financial management. A well-crafted budget balances your building's expenses with its projected revenue, ensuring financial stability and long-term success.

At the highest level, your budget should be separated into three buckets:

Operating Expenses

Capital Expenses

Reserve Funds

Operating Expenses (OpEx): Usually comprising 50-70% of the total budget, these are the day-to-day costs of running your building. This includes everything from utilites to staff payroll to insurance

Capital Expenses (CapEx): For non-recurring planned major improvements,projects, or repairs to your building. This includes funds for projects in the coming years

Reserve Funds: Your financial safety net for any unexpected costs.Conducting every 3-5 years will help determine the right fund amount, but you should aim to allocate at least 10% of your budget

Click to show: Legal requirements

Click to hide: Legal requirements

LEARN MORE

Having a condo or co-op budget isn’t just important for running a healthy building, it’s the key to complying with several NYC laws and requirements.

Maintain adequate reserve funds

Designating at least 10% of your annual
budget to reserve funds is the widely recommended threshold.

Financial transparency to owners

Remember to provide annual financial statements within 120 days of fiscal year-end to unit owners

Inform prospective buyers

Local Law 157 requires providing detailed financial disclosures to prospective buyers

Staff wages and benefits

Repairs and maintenance

Utilities

Management fees

Property taxes

Insurance

Legal and accountining

Building operations expenses

Miscellaneous

A closer look

What’s in my OpEx budget?

Wonder where the majority of your building’s expenses go? We broke down it down into the biggest buckets and shared some tips to reduce costs.

Staff wages and benefits

This is often the largest building expense. Performance-based incentives can help boost productivity and increase resident satisfaction. Does your building meet the prevailing wage threshold?

Utilities

Electicity,water ,gas and sometimes internet for common areas. While usage-based, implementing energy-efficient systems and negotiating bulk rates can help reduce costs over time.

Utilities

A crucial, largely fixed expense protecting against various risks. While sometimes you can shop around for a better rate, increased rates are largely unavoidable. Here are some helpful tips on how to best mitigate costs

Property

This cost is only applicable to co-ops! This is really a fixed cost and unique to each building (based on market & assessed value). You should work with a tax certiorari to contest any increases in the assessed value by the city

Repairs

Pretty straightforward. For once "you can't fix ain't broke" doesn't apply! Establishing a preventative maintenance plan can help control expenses and prevent costly emergency repairs

Management

This varies based on the building and the scope of the management company.Creating goals and metrics to measure performance will help determine if you're getting your money's worth

Legal and accounting

Fees essential for governance and compliance. Having organized financial records saves your CPA time,and you money.A trusted attorney ensures you use their services only when needed,reducing long-term costs.

Building operations expenses

Think service contract(elevator,HVAC,pest control) and supplies. Annually review vendor contracts to make sure you're getting the best value. Bulk purchasing can help optimize costs

Miscellaneous

This flexible category covers various smaller expenses. Regularly reviews these costs to ensure they're necessary and look for patterns that might indicate a need for a new budget category